Dicker: Buy Anadarko Petroleum On $100+ Oil

Dan Dicker talks with Jim Cramer about the best value he sees in oil stocks right now: Anadarko Petroleum.

NEW YORK (TheStreet) -- Oil continues to show strength, a trend I predicted would prove itself out throughout 2014, despite the majority of analysts who expected prices to fall. While many of the domestic, independent exploration and production companies have shown strength this year in response to higher oil prices, a few remain undervalued. One of them, I believe, is Anadarko Petroleum (APC).

We've seen big moves from some of the hot players in some of the hottest shale plays here in the U.S. In the Bakken, Continental Resources (CLR) continues to cook. In the Eagle Ford, EOG Resources (EOG) is running. In the Wolfcamp area of the Permian shale play, Pioneer Natural Resources (PXD) and Cimarex (XEC) are continuing to rally.

Both Jim Cramer and I have highlighted these companies in the past and we don't at all believe that their stories are ending, but there are other companies that show deeper value to me that I think are due to make some terrific strides equivalent to the stocks I've just mentioned.

Of them, the most undervalued appears to me to be Anadarko Petroleum. If you were just listing the hottest potential oil developments in the U.S., you'd see that Anadarko has a major footprint in most of them, including the Marcellus, Eagle Ford Shale and in the Shenandoah basin in the Gulf of Mexico. In their latest call reporting fourth-quarter 2013 results, Anadarko showed a sequential increase in volumes of over 25% and an increase in sales of 12%.

Based upon the valuation of reserves and the production growth, shares of Anadarko, if it were being valued in the same way as an EOG Resources or a Continental would be closer to $125 instead of the $83 it trades at today.